HySTeria! New Rules to Tax our Brains
(Disclaimer: I am not a professional tax consultant, although I can write one into an animation script for you.)
For those of us who are registered to collect the GST or HST, just a helpful reminder that as of July 1, 2010 Ontario and BC have replaced the GST with the HST.
It would be cool if it were the same HST in both places, but it’s not. In BC it’s 12%. In Ontario, it’s 13%.
So say you do your own invoicing and/or file your GST/HST return yourself. Or maybe you just want to make sure your agent and/or accountant are invoicing/filing correctly.
The important thing to remember is you must bill your client the GST or HST rate of the province or territory where THEY are based.
So if you are writing or story editing for a BC production company, you charge an HST of 12%. For an Ontario production company, you charge an HST of 13%. If you’re writing for a company based in Alberta, you charge 5% GST.
Maybe in the past you’ve written for various production companies based in GST provinces and HST-participating provinces like Nova Scotia, so you know the drill. But for a lot of us, this will be new territory. You know, like Nunavut, only chillier. (Nunavut: 5% GST).
For a list of current GST/HST rates for each province and territory go to:
WARNING! DO NOT SPEND THE GST/HST YOU RECEIVE FROM YOUR CLIENT.
For those of us used to collecting a measly 5% GST, it wasn’t such a big deal when it came time to remit it to the Canada Revenue Agency. But wow, 12%? 13%? That’s like…more.
It could be so tempting to spend it on trivial stuff like shelter and electricity instead of letting it couch-surf in your bank account until it’s time to send it off on its electronic journey to Ottawa.
Oh sure, if you’ve shelled out some GST/HST on eligible business expenses, you can claim that back. But for a lone self-employed artist, it’s all like some super-evil financial responsibility test. “We will force those irresponsible animation writers to collect money, hold onto it on a quarterly or yearly basis, then…wait for it…make them give it to us! Mouhahaha!”
Or it’s kind of like being Tantalus in the Underworld only instead of the fruit being out of reach, we have to hold it in our hands for a while, then feed it to someone else.
Now I like government grants, affordable health care, and a musical ride as much as the next maple syrup swigging taxpayer (maple syrup: as a grocery item, GST/HST exempt). But I’ve often wondered why the government doesn’t just make the production companies send the tax straight to the them and let us deduct the GST/HST we spend on business expenses on our income tax returns. I’m sure there’s a logical reason, but as I disclaimed earlier, I’m not a professional tax consultant.